(Alliance News) - TomCo Energy PLC on Wednesday hailed the "favourable economics" after receiving a report on a proposed oil sands plant in the US state of Utah.
The pre-front-end engineering and design report for the potential plant, which TomCo will own 50% of, estimate the total incremental cost of production will fall below USD30 a barrel. Costs below USD25 a barrel are targeted following the next stage of the design process.
A barrel of oil changed hands at USD41.38 each on Wednesday morning in London.
"The report provides analysis of the plant operations and indicates favourable economics," TomCo said.
"The report concludes that the plant could be constructed in a relatively short time frame - estimated to be just over a year from the commencement of construction to the start of production."
The estimated capital cost for a 10,000 barrels of oil per day plant is tipped to come in at USD185 million.
The asset will be operated by Greenfield Energy LLC, a company jointly-owned by TomCo and Texas-based Valkor LLC.
TomCo shares were 6.3% lower at 0.75 pence each in London on Wednesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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Tomco Energy (TOM)